• Demographic changes
Collectively, the three factors are expected to bring about profound structural changes.
These changes offer both opportunities and threats, with regard to labour market employment. The OECD estimate that 14% of existing jobs will disappear as a result of automation in the next 15-20 years, and another 32% are likely to change radically. There is real concern about the “hollowing out” of middle-skilled jobs, and the emergence of many lower-quality and precarious jobs. Without action there is likely to be a growth in inequalities.
A process of creative distraction is underway, whereby certain tasks are taken over by robots or offshored and other, new ones are created. The OECD therefore suggests there is a need to help workers to make job transitions through effective and timely employment services, and the use of prevention and early intervention measures.
The OECD suggests that many individuals with high skills in expanding occupations may potentially benefit from the changes. However, this does not mean that they will not be impacted. Most will need to modernise their skills and working practices during their working lives. Digitalised businesses often employ workers on a self-employed basis and as individuals live longer they face more frequent jobs changes and the risk of skills obsolescence. Alongside structural changes, a possible slowdown in the global economy over the next couple of years could adversely impact short-term employment prospects.
To date, the overall employment rate has been rising in most OECD countries, driven by the share of women at work. However, looking to the future “one thing is clear: action on the margin will not do.” Policy changes include the need to move away from a model of front-loaded education, mainly developed in schools and universities, to a system where skills are continuously updated during the individual’s working life. It is recognised that this will require public funding. With public budgets already under pressure this may lead to a reassessment of current priorities and a reassignment of funding.
If the OECD’s assessment is correct, and its policies advice accepted by governments, higher education providers could find public resources increasingly orientated to support life-long learning.